Bresnan: Comeback kid

Cable vet gets the basic urge, spends $735M for small AT&T systems
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Bill Bresnan has a problem: He's a lousy retiree. About a year after selling his selling his cable company to Charter Communications, the cable veteran started a comeback, chasing the same kind of systems he had unloaded. Finally, after a year of plotting, he is back, cutting a $735 million deal to buy systems from AT&T Broadband.

Bresnan started in cable in 1958 and, in the 1970s, became president of Teleprompter's cable division and later CEO of Group W Cable. Like many senior executives at the big corporate cable operators in the early '80s, he realized that he could make a lot more money starting his own, smaller operation. So he bought some systems from Group W and started Bresnan Communications, buying systems mostly in Michigan and Minnesota.

By 1999, he had amassed systems serving 690,000 subscribers and sold out to Charter for $3.1 billion, or $4,300 per subscriber in Charter stock, cash and assumed debt.

"I didn't really want to sell then," he says, "but they made us an offer that we could never have refused."

He wasn't happy. He managed family investments but missed being a cable operator. The major trauma in his life was the October 2000 death of his wife of 43 years, Barbara.

"After Barbara died, he was really chewing to get back into business," says an industry friend.

"It's easier for others to psychoanalyze me than for me to do it," Bresnan says. "It's a terrible loss; there's a terrible loss. Nothing can ease that."

Bresnan was close to a deal for AT&T systems—located in Montana, Wyoming and Colorado—last summer. But Comcast's hostile bid for AT&T Broadband ended that. With Comcast's takeover on track, AT&T put the properties back up for bid in March.

They're small, and the systems have been battered by DBS, according to industry executives, because they have been starved for rebuild capital. The purchase price comes to just $2,450 per subscriber—far less than the $4,000- to $5,000-per-customer price of suburban systems. Executives say the deal is also about 10.5 times annualized cash flow vs. the more typical 15 times. He plans to invest another $1,000 per sub in upgrades over the next three years.

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